There is an 18-day period from the date of service to apply to the Court to set aside the statutory demand if you are in the UK. There are extended periods for making such an application if you are outside the UK. One of the grounds for such application is if the money demanded is disputed upon substantial grounds. The Court can grant an extension of time for this application to be made. However, such an application cannot be made once a bankruptcy petition has been presented.
If a statutory demand is served, legal advice should be sought without any delay. It is quite common to have prepared and filed an application to set aside the statutory demand within a short timescale.
Please take legal advice as soon as possible after a statutory demand has been served.
Statutory Demands and Companies
For Companies, if a statutory demand is served, the remedy is to apply to the Court for an injunction to restrain the filing of a winding-up petition. If the debt is disputed, the Creditor is usually at first asked to provide an undertaking, not to file a winding-up petition without giving 7 or 14 days written notice to the alleged debtor’s solicitors.
An injunction will also need to be issued where relevant to restrain the advertisement for a winding-up petition which can occur seven days after the date of service of the winding-up petition. Advertisement of the petition will result in the freezing of a company’s bank account, which will usually cause serious difficulties for a company.